PENNSYLVANIA PUBLIC UTILITY COMMISSION Harrisburg, PA 17105-3265

Public Meeting held February 12, 2015 Commissioners Present:

Robert F. Powelson, Chairman, Joint Statement John F. Coleman, Jr., Vice Chairman James H. Cawley Pamela A. Witmer, Joint Statement Gladys M. Brown

Application of Lyft, Inc., a corporation of the State of Docket No. A-2014-2415045 Delaware, for the right to begin to transport, by motor vehicle, persons in the experimental service of Transportation Network Company for passenger trips between points in Allegheny County

Application of Lyft, Inc., a corporation of the State of Docket No. A-2014-2415047 Delaware, for the right to begin to transport, by motor vehicle, persons in the experimental service of Transportation Network Company for passenger trips between points in Pennsylvania

OPINION AND ORDER REGARDING COMPLIANCE FILING

BY THE COMMISSION: Before the Pennsylvania Public Utility Commission (Commission) is the determination as to the completeness and adequacy of the compliance filings of Lyft, Inc. (Lyft) with respect to the requirements to transport, by motor vehicle, persons in experimental service set forth in each of two separate Commission Orders issued on December 18, 2014, at Docket Nos. A-2014-2415045 and A-2014-2415047 (collectively, the December 18th Order). As set forth more fully below, the compliance filings and supporting information are consistent with the requirements and conditions set forth in the December 18th Order for issuance of a certificate of public convenience to offer experimental motor carrier service.

DISCUSSION

The Commission’s December 18th Order conditionally approves Lyft to transport, by motor vehicle, persons in the experimental service of passenger trips between (1) points in Allegheny County (Docket No. A-2014-2415045) and (2) points in Pennsylvania, excluding trips which originate or terminate at points in Allegheny County and the City of Philadelphia (Docket No. A-2014-2415047). However, the December 18th Order requires Lyft to submit the following documentation to the Commission before exercising the above-referenced transportation authority:

a. A Compliance Plan demonstrating how Lyft will achieve compliance with the conditions set forth in Appendix A of the December 18th Order. The Plan shall be include the identities and office locations of the employees or individuals who will be responsible for regulatory compliance.

b. A Form E Certificate of Insurance evidencing compliance with the Commission’s insurance requirements and coverage amounts set forth in the December 18th Order, regardless of any insurance coverage held by Lyft’s drivers or operators.

c. A tariff consistent with the December 18th Order.

2 As of the date of this Order, Lyft has appropriately filed with the Commission an acceptable Form E Certificate of Insurance and Tariff as required by the December 18th Order. On January 21, 2015, Lyft also filed its Compliance Plans at Docket Nos. A-2014-2415045 and A-2014-2415047 (collectively, the Compliance Plan) demonstrating how it will achieve compliance with the conditions set forth in Appendix A of the December 18th Order. On January 28, 2015, the Insurance Federation of Pennsylvania, Inc. (“Insurance Federation”) filed “objections” with the Commission regarding Lyft’s Compliance Plan. The comments in the Insurance Federation’s filing, as well as Lyft’s response thereto filed on February 3, 2015, have been considered by the Commission in review of Lyft’s compliance filings. On February 2, 2015, the Protestants named in the December 18th Order filed a letter with Chairman Robert F. Powelson regarding Lyft’s Compliance Plan.1 This Order will specifically address the adequacy of the Compliance Plan.

Components of Lyft’s Compliance Plan

Insurance

Appendix A of the December 18th Order requires Lyft to: (1) file with the Commission a Form E Certificate of Insurance; (2) inform drivers, in writing, of the levels of insurance coverage provided during certain stages of operation; and (3) direct and verify that drivers have informed their personal automobile insurer regarding any policy impacts that may be caused by operating the vehicle for transportation network company use. To comply with these requirements, on January 16, 2015, Lyft filed with the Commission an acceptable Form E Certificate of Insurance affirming coverage as required by the December 18th Order.

1 Although such letter does not constitute a formal pleading and was filed after the filing deadline, the Commission considered this letter, and Lyft’s response thereto, in review of Lyft’s compliance filing as no party or entity, including the Commission, was prejudiced by this delay.

3 Also, in the Compliance Plan, Lyft has indicated that it will inform drivers in writing, through electronic notification, of the levels of insurance coverage provided during certain stages of operation as required by the December 18th Order. Further, Lyft will require each driver to verify through an electronic signature during the driver on- boarding process that, within 30 days of being activated on the platform, he/she will contact their personal automobile insurer regarding any policy impacts that may be caused by operating the vehicle for transportation network company use. Finally, in their Compliance Plan, Lyft has identified the specific individuals responsible for compliance with these insurance requirements.

As such, the Commission has determined that Lyft has satisfied the requirements regarding insurance set forth in Appendix A of the December 18th Order.

Driver Integrity

Appendix A of the December 18th Order requires Lyft to undertake at certain intervals of time: (1) driver background checks consistent with 52 Pa. Code §§ 29.503 and 29.505 and (2) drivers’ history checks consistent with 52 Pa. Code § 29.504. To comply with these requirements, Lyft has indicated in its Compliance Plan that it will continue, at the time of driver sign-up, to undertake driver criminal background checks consistent with 52 Pa. Code §§ 29.503 and 29.505 and drivers’ history checks consistent with 52 Pa. Code § 29.504. Lyft will implement a process to conduct criminal background checks and drivers’ history checks on an annual basis thereafter.

In its Compliance Plan, Lyft specifically indicated that is utilizes nationally accredited thirty party vendors, including Sterling Backcheck, to conduct its criminal background checks, and American Driving Records, Inc., to conduct its drivers’ history checks. Lyft has also included in its Compliance Plan details regarding the specific timing of criminal background and drivers’ history checks, specifications for screening of

4 drivers, and the factors for determining driver disqualification. Finally, Lyft indicated that new applicants must first pass the criminal background check and drivers’ history check before accepting trip requests and that existing drivers failing either of these checks will be immediately deactivated from Lyft’s platform.

As part of these criminal background and drivers’ history checks, Lyft will also continue to conduct drug and alcohol screening of its drivers. Drivers who violate Lyft’s “zero tolerance policy” will be immediately suspended from accessing Lyft’s platform, pending an investigation.

In their Compliance Plan, Lyft has identified the specific individuals responsible for compliance with these driver integrity requirements. As such, the Commission has determined that Lyft has satisfied the requirements regarding driver integrity set forth in Appendix A of the December 18th Order.

Vehicle Safety

Appendix A of the December 18th Order requires Lyft to: (1) ensure that drivers’ vehicles successfully pass the Pennsylvania Department of Transportation (PennDOT) inspection pursuant to 52 Pa. Code § 29.405 annually; (2) ensure that drivers’ vehicles remain in continuous compliance with the Commission’s vehicle standards at 52 Pa. Code §§ 29.402(1) and (2) and 29.403; (3) not permit the use of vehicles older than eight model years consistent with 52 Pa. Code § 29.314(d); and (4) require that all vehicles be marked as specified at 52 Pa. Code §§ 29.71 and 29.72 during certain stages of operation.

To comply with these requirements, Lyft has indicated in its Compliance plan that it will ensure that drivers’ vehicles successfully pass the annual PennDOT inspection by collecting evidence of the successful completion of such annual inspection during the

5 driver sign-up process and annually thereafter. Also, Lyft will ensure that drivers’ vehicles remain in compliance with the Commission’s vehicle standards by:

a. Informing drivers during the sign-up process that they are responsible for complying with such standards and resolving any deficiencies with Commission enforcement officers.

b. Following-up with drivers to resolve negative feedback about their vehicles that is provided by customers.

c. Requiring drivers to provide evidence of successful completion of PennDOT inspection on an annual basis.

d. Ultimately deactivating a driver from the platform who fails to provide evidence of successful annual PennDOT inspection or who fails to rectify any safety-related deficiencies with their vehicles.

Additionally, Lyft will ensure that drivers are not using vehicles older than eight model years as required by the December 18th Order. To ensure compliance with this requirement, Lyft will, within thirty days prior to vehicles reaching eight model years old, provide notification to drivers that their vehicles need to be replaced. If such a vehicle is not replaced, Lyft will deactivate that driver from the platform until the vehicle is replaced.

In its Compliance Plan, Lyft notes that Section 29.314(d) of the Commission’s regulations (which does not permit the use of vehicles older than eight model years) is currently the subject of a final rulemaking order which, if approved, will revise the eight-model year requirement to ten model years for conventional vehicles or twelve model years for alternatively fueled vehicles. See Final Rulemaking Order in Vehicle List, Age and Mileage Requirements for Taxis and Limousines, Docket No. L-2013-2349042 (Order entered November 19, 2014). The Commission desires to extend the use of vehicles that are ten model years in age (or twelve model years in age for alternatively fueled vehicles) to transportation network companies, including Lyft.

6 However, the Commission will require Lyft to comply with the current eight-model year requirement until such time as this requirement is revised and in effect for taxicab and limousine companies.

7 Further, Lyft will ensure that all vehicles be marked as specified at 52 Pa. Code §§ 29.71 and 29.72 by requiring that each driver place a pink Lyft placard in the windshield of the vehicle, which is clearly visible from outside the vehicles at all times, while operating in certain stages. In its Compliance Plan, Lyft provided the Commission with photographs of the Lyft placards, which are 4.75 inches by 4.75 inches in size. Lyft currently distributes these placards with the Lyft logo to all drivers and will continue to do so in the future.

Upon review, we find that, for purposes of transportation network service, the placard will be adequate for both passengers and enforcement officers to identify the vehicle as one being used for transportation network service. Therefore, we shall waive the more detailed vehicle marking requirements in our regulations. However, the Commission reserves the right to require Lyft to use different or additional vehicle markings in the future if experience indicates that the placards, as presently proposed, are not adequate.

In their Compliance Plan, Lyft has also identified the specific individuals responsible for compliance with these vehicle safety requirements. At this time, the Commission has determined that Lyft has satisfied the requirements regarding vehicle safety set forth in Appendix A of the December 18th Order.

RecordKeeping, Reports and Audits

Appendix A of the December 18th Order requires Lyft, among other items previously discussed, to: (1) maintain verifiable records for service for a period of two years after the service was provided; (2) comply with the accident reporting requirements of 52 Pa. Code § 29.44; (3) comply with the assessment reporting requirements of

8 52 Pa. Code § 29.43; and (4) explain its proposed dynamic pricing model during emergencies and natural disasters, including the applicability of Pennsylvania’s Price Gouging Act, 73 P.S. §§ 232.1, et seq.

To comply with these requirements, Lyft indicates in its Compliance Plan that it will maintain verifiable records for service for a period of two years after the service was provided, including: trip information (date, time, origination, destination and fare), vehicle information under 52 Pa. Code § 29.314(c), and the identity and driver’s license numbers of all drivers. Additionally, Lyft will ensure compliance with the Commission’s accident reporting requirements by providing telephonic notification to the Commission’s Bureau of Technical Utility Services’ Transportation Division within 24 hours of an accident resulting in death of a person, and maintaining records of any accident that results in a police report for a period of one year. Further, Lyft states in its Compliance Plan that it, its affiliate and third party contractors will comply with the assessment reporting requirements at 52 Pa. Code § 29.43, including reporting the gross intrastate operating revenues derived from the experimental service authority. Lyft will also submit quarterly reports demonstrating its continued compliance with each certificate condition.

In their Compliance Plan, and as set forth in their proposed Tariff, Lyft explains its proposed dynamic pricing model during emergencies and natural disasters as required by the December 18th Order. Lyft indicates that when a natural disaster or emergency results in a state of disaster emergency being declared by the Governor of Pennsylvania, prime time pricing will be computed to comply with the Pennsylvania Price Gouging Act, 73 P.S. §§ 232.1, et seq. In the event that the Governor of Pennsylvania declares a state of disaster emergency, Lyft has the capability to turn off prime time pricing for the area impacted by the natural disaster or emergency for up to 30 days following the event.

9 Finally, Lyft has identified the specific individuals responsible for compliance with these recordkeeping, reports and audits (and pricing) requirements in their Compliance Plan. As such, the Commission has determined that Lyft has satisfied the requirements regarding recordkeeping, reports and audits set forth in Appendix A of the December 18th Order.

Although the records of the Commission demonstrate that Lyft has complied with all of the necessary requirements set forth in the December 18th Order to operate, the Commission specifically reserves the right to require Lyft to provide the Commission with additional documentation or information evidencing compliance with these requirements in the future.

CONCLUSION

Based upon our review of the record, and given the experimental nature of the service offered by transportation network companies, we find that Lyft has complied with the necessary requirements to operate set forth in the December 18th Order. As such, a Certificate of Public Convenience evidencing the Commission’s approval of the right to operate as referenced in the December 18th Order shall be issued to Lyft, Inc.; THEREFORE,

IT IS ORDERED:

1. That the records of the Commission demonstrate that Lyft, Inc. has complied with all of the necessary requirements to operate as set forth in the December 18th Order.

2. That a Certificate of Public Convenience evidencing the Commission’s approval of the right to operate as referenced in the December 18th Order shall be issued to Lyft, Inc.

10 3. That the Certificate of Public Convenience will be valid until abandoned, until two (2) years from the date of issuance, or until the Commission enacts regulations governing the new class of service, whichever occurs first.

4. That the operating rights granted by this Order shall not limit the right of the Commission to require Lyft, Inc. to provide the Commission with additional documentation or information evidencing compliance with the requirements set forth in the December 18th Order in the future.

5. That Lyft, Inc. shall submit quarterly reports to the Commission’s Bureau of Technical Utility Services demonstrating its continuing compliance with each condition set forth in Appendix A of the December 18th Order.

6. That Lyft, Inc. shall comply with all provisions of the Public Utility Code as now existing or as may be hereafter amended, and with all regulations applicable to call and demand service with the exception of the following regulations which are waived: 52 Pa. Code §§ 21.2, 23.32, 23.64, 23.67, 29.62, 29.101, 29.103, 29.313(c) and (f), 29.314(b) and (c), 29.315, 29.316, 29.317, 29.318, 29.356 and 29.402(3).

7. That failure to comply with the terms and conditions of the December 18th Order and the Commission’s regulations shall be sufficient cause to impose civil fines or to suspend, revoke or rescind the rights and privileges conferred by the certificate.

8. That any directive, requirement, disposition or the like contained in the December 18th Order shall have the full force and effect as if fully contained in this part.

11 9. That a copy of this Opinion and Order be served on all parties of record.

BY THE COMMISSION,

Rosemary Chiavetta Secretary

(SEAL)

ORDER ADOPTED: February 12, 2015

ORDER ENTERED: February 12, 2015

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